The former secretary of labor explores why the median wage remains so low even as employment is on the rise Jobs are coming back, but pay isn’t. The median wage is still below where it was before the Great Recession. Last month, average pay actually fell.
What’s going on? It used to be that as unemployment dropped, employers had to pay more to attract or keep the workers they needed. That’s what happened when I was labor secretary in the late 1990s.
It still could happen – but the unemployment rate would have to sink far lower than it is today, probably below 4 percent.
Yet there’s reason to believe the link between falling unemployment and rising wages has been severed.
For one thing, it’s easier than ever for American employers to get the workers they need at low cost by outsourcing jobs abroad rather than hiking wages at home. Outsourcing can now be done at the click of a computer keyboard.
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